Tom
Administrator
- Joined
- Jan 13, 2005
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We see a lot of misinformation and confusion about California sales and use tax, and it's compounded when people introduce the subject of a Montana LLC. So I thought I'd post this synopsis, partly so I can refer people to it in the future instead of re-stating it. Some caveats - I'm neither a lawyer nor a tax professional, and California tax laws change, so be sure to research the most recent information on the California Board of Equalization web site.
California sales tax
The selling dealer is required by law to collect sales tax at the time of purchase, unless you qualify for an exemption, such as purchasing for use outside California. In the latter case, you would also need to take delivery outside of California, typically by the selling dealer agreeing to drive the RV to an adjacent state, and you take possession there. The dealer would need to provide additional documentation regarding the out-of-state delivery to the BOE.
Sales tax applies irrespective which state or country you reside, unless specifically exempted.
Pub 34, dowloadable from the list of publications on this BOE page, covers the requirements for vehicle dealers. On page 2 of the publication you'll see the exemption for Vehicles purchased for use outside of California, and the Required documentation the dealer has to submit to BOE.
Page 2 of Pub 34 also covers the case of a California resident claiming the vehicle is being purchased for use outside of California; In the latter case, additional documentation is required from both the dealer and the purchaser.
California use tax
Use tax typically applies if a vehicle is purchased in another state and brought into California for use here.
Montana LLC
LLCs formed in states such as Montana have their uses, typically for the registration of vehicles in that state. This is especially convenient for overseas visitors who do not have a physical address in the U.S., but who wish to register a vehicle there.
Having a Montana LLC and having the LLC buy the RV from a California dealer does not relieve the dealer of collecting California sales tax at the time of purchase, unless you qualify for one of the exemptions and the required documentation is submitted to BOE. An example of an exemption given above would be taking delivery in another state.
Forming an LLC is not necessary to be legally exempt from California sales tax.
You can research the above subjects further at the CA State Board Of Equalization web site.
California sales tax
The selling dealer is required by law to collect sales tax at the time of purchase, unless you qualify for an exemption, such as purchasing for use outside California. In the latter case, you would also need to take delivery outside of California, typically by the selling dealer agreeing to drive the RV to an adjacent state, and you take possession there. The dealer would need to provide additional documentation regarding the out-of-state delivery to the BOE.
Sales tax applies irrespective which state or country you reside, unless specifically exempted.
Pub 34, dowloadable from the list of publications on this BOE page, covers the requirements for vehicle dealers. On page 2 of the publication you'll see the exemption for Vehicles purchased for use outside of California, and the Required documentation the dealer has to submit to BOE.
Page 2 of Pub 34 also covers the case of a California resident claiming the vehicle is being purchased for use outside of California; In the latter case, additional documentation is required from both the dealer and the purchaser.
California use tax
Use tax typically applies if a vehicle is purchased in another state and brought into California for use here.
Montana LLC
LLCs formed in states such as Montana have their uses, typically for the registration of vehicles in that state. This is especially convenient for overseas visitors who do not have a physical address in the U.S., but who wish to register a vehicle there.
Having a Montana LLC and having the LLC buy the RV from a California dealer does not relieve the dealer of collecting California sales tax at the time of purchase, unless you qualify for one of the exemptions and the required documentation is submitted to BOE. An example of an exemption given above would be taking delivery in another state.
Forming an LLC is not necessary to be legally exempt from California sales tax.
You can research the above subjects further at the CA State Board Of Equalization web site.
